By how much should the EU cut emissions? (II)

The EU must tell the UN by 31 January how far it will reduce carbon-dioxide emissions over the next decade. Gordon Moffat of Eurofer argues that it should stick with its current commitment, a 20% reduction by 2020.

European Voice

1/20/10, 11:00 PM CET

Updated 4/12/14, 6:58 PM CET

The UN’s summit at Copenhagen, at which the EU had little or no influence on the final agreement, was a defeat for the EU’s over-heated climate-change policy, a policy based on the belief that where Europe led, others would follow.

Much now depends on the EU’s ability to lower the temperature of its policy, to a level that enables it to embrace a more predictable, sustainable climate-change approach that sets ambitious but achievable objectives that do not jeopardise European industry.

After the Copenhagen failure, there is currently no justification to move the EU’s climate-change target from -20% to -30%. Political credibility is involved. In December, EU states said they would adopt the tougher target “provided that other developed countries commit themselves to comparable emission reductions [meaning, -20%] and that developing countries contribute adequately according to their responsibilities and respective capabilities”. These conditions have not been met; Japan is the only other major developed country that has made a ‘comparable’ commitment (-25%). Abandoning those conditions would destroy the credibility of the EU’s position in future negotiations.

The EU has already led by example. It has reduced emissions since 1990 and is on target to fulfil its commitments under the Kyoto Protocol. But this puts it alone in the developed world: US emissions have grown by 17% (Kyoto target: -4%), Japan’s by 14% (-6%), Canada’s by 26% (-6%) and Australia’s by 30% (+8%).

Nor do the plans of the leading emerging economies suggest they will follow the EU’s example. They intend to reduce emissions to 20%-45% below the trajectory of their ‘economic performance’, but such ‘commitments’ hide the reality: China, which is already responsible for about 20% of global emissions, would be able to increase emissions by 75%-90%, compared to its 2005 yardstick. Moreover, in 2020, China’s per-capita emissions (10-11 tons of CO

2

) would be higher than those of the EU (8-9 tons of CO

2

based on a 20% reduction target). We should not require developing countries to reduce their overall emissions, but their large industrial emitters are capable of meeting targets equivalent to those in the developed world.

The EU’s strategy of leading by example has failed. The EU must now review its strategy of unilateral commitments and take a more hard-headed approach, like the US.

Ambitious reduction targets alone will not limit the increase in the average global temperature to 2°C. The EU’s answer to the failure of Copenhagen must be to develop breakthrough technologies that could be applied worldwide and would prove that global emission reductions are feasible.

The European steel industry, for example, reduced its emissions by 20% in 1990-2005. Under the EU’s emissions trading scheme (ETS), it should reduce its emissions by a further 21%. It is not technically able to do so at present – and so any increase of the ETS target beyond -21%, as part of a broader EU target of a 30% reduction, would inevitably lead to a fall in EU steel production and to carbon leakage on a massive scale. Already the ETS in its existing form may lead to carbon leakage, as only five out of 100 installations (based on “the average of the 10% most efficient installations”) will be able to meet 100% of their needs through free allowances. And even this is contested by Commission advisers, acting against the letter and spirit of the ETS directive adopted by member states and the European Parliament in 2008.

To develop breakthrough technologies, the Community needs to increase its financial support for research and development, and for pilot and demonstration projects – an investment that, as well as helping the environment, would create new jobs in Europe.

In the meantime, and until equal treatment of industrial competitors is provided worldwide, the ETS directive should be implemented in a way that ensures that at least the most efficient European installations in sectors at risk of carbon leakage receive all their emissions allowances free of charge (subject to achievable benchmarks) and are compensated for ETS-related increases in electricity costs. If necessary and appropriate as a means to level the playing-field, the EU should also consider applying border adjustment as an additional measure.

Gordon Moffat is the director-general of Eurofer, the European Confederation of Iron and Steel Industries.